Doorstop Interview
Biocane Mill, Sunshine Coast, Queensland
Monday, 5 January 2009
SUBJECTS: Visit to Biocane Mill; Economic Security Strategy
TREASURER:
It gives me great pleasure actually to be back in the Bli Bli valley, not very far from where I grew up. Not very far from where my grandparents had a cane farm over here behind the Fairy Tale Castle as it's now known. So, the Bli Bli valley is a rich valley. It's an important part of the local environment. And of course it's been a very important part of the sugar cane industry in the Maroochy region, which is a very important rural industry which in recent times has done it really tough, particularly after the closure of the Moreton Mill some years ago.
So, I'm delighted to be here today to announce reinstatement of just over $1 million in federal funding to Biocane, because what's happening here is very innovative. What's happening here presents a real future for many local sugar cane farmers. Because this product here, Cow Candy, can be exported particularly to Asia - exported to Asia in a form which adds value and provides a new source of income for cane farmers in the region.
Now, some time ago, under the previous government, a grant was approved to Biocane for this facility. But in the dying days of the previous government, within the Department of Agriculture, questions were raised about the extent to which the agreement was being complied with. That caused an investigation which occurred under the previous government and through this Government. And Agriculture Minister Tony Burke, myself and the Prime Minister committed to having a look at all of those processes and coming back and talking to Biocane and to local stakeholders about what could be best achieved here locally to comply with federal requirements.
And I'm pleased to say today that that $1 million that was being withheld will now proceed - proceed to assist Biocane to complete the building and construction of this factory. This will be of enormous significance to Biocane and to its future. The income source from the export of Cow Candy from this factory can be of the order of a minimum of something like $20 to $30 million per year, up to as much as $90 million per year over the years ahead. What that represents is a future for sugar production in the Maroochy region, which is an important part not only of the local economy, but also of the sustainability of businesses in rural areas in this region, because there aren't that many products which can be grown on the Maroochy flood plain. Sugar is one of them, and now it can become a value-added industry in the form of Cow Candy. And this has all been done through, I believe, the innovation and the entrepreneurial approach of all of those associated with Biocane.
So I say to Scott Grimley and to all of those associated with the company, that the Federal Government is pleased to be able to proceed with this grant [inaudible] been through all the formal procedures that are required to ensure that public money is accountably spent. And that's why we've now reinstated the grant. I would like to thank all of those stakeholders that lobbied so hard for the reinstatement of this grant, including Debbie Blumel here, a local councillor, who made strong representations, as did the local member, Alex Somlyay.
So, the local community is the winner here, and I certainly wish Biocane all the best for the future. These grants will of course have to be accounted for in the proper way, but Mr Grimley very much appreciates the fact that the Federal Government had a new look at all of the circumstances and can proceed with this grant. Because what it means at the end of the day is jobs, value-added production and exports for Australia. And of course, in an environment of a global financial crisis, doing everything we can to support viable local businesses, viable local farmers, viable local manufacturers such as Biocane, is terribly important to secure the future of our economy. So with those few words I might just hand over to Mr Grimley, who might say a few words, and maybe Councillor Blumel as well. And then I'm happy to answer your questions.
GRIMLEY:
Thank you Mr Treasurer. It's wonderful to have the Treasurer here, and Debbie Blumel also, and to be able to say how much our company, the growers who will be supplying it, appreciate the support that we've had, not only from the Federal Government, but also from the local council. And indeed the State Government assisted us also in the early stages of the project.
This project, as the Treasurer has said, is extremely important for this region. It really does give a future for the cane lands. It maintains the green, clean environment that we have. The cane that will be produced will be green cane harvested. It'll be grown under sustainable agricultural practices. And I think this will be a demonstration of what can be done with Australian technology and innovative approaches. So we greatly appreciate the fact that the grant has now been reinstated. We went through some rough times there for a while. But the Treasurer assured me, I think back on the 4th of July at the Nambour RSL, that he would make sure there was a fresh acquittal with a fresh set of auditors to have a look at it. And they came up and said yes, everything that had been done had been done in accordance with the grant. And we are very pleased indeed that the Treasurer has been good enough, along with the Minister, Tony Burke, to see that we had a just cause and that this was worthy of funding.
TREASURER:
Well, certainly Tony Burke asked me to pass on to you his best wishes. He is a fervent advocate of innovation in agriculture, and I think that's what we've seen here in this factory and with this product.
GRIMLEY:
We certainly do really appreciate the fact that the value of this to the community and to the Australian economy had been well and truly recognised, and thank you most sincerely.
BLUMEL:
It's a great pleasure to be here on behalf of the Sunshine Coast Council today, and hear this exciting news from the Federal Treasurer about the reinstatement of the grant. The Sunshine Coast Council has been trying to work out what we can do with the hundreds of thousands of hectares of cane land that have been lying dormant and defunct since the closure of the Moreton Mill in 2003. And as you know, developers have got contracts on much of that land and seek to roll out urban sprawl. Unfortunately it is flood plain, and one of the few crops that can viably and profitably be grown there is sugar cane. So, it's a tremendous achievement really that the sugar industry has been able to be flexible and adapt to the circumstances of the closure of the mill. And to have this wonderful innovative technology, born and bred in Queensland and applied here on the Sunshine Coast, that's a huge achievement.
So, one of the biggest benefits to this region of course is that if Biocane are able to meet their ambition of exporting [inaudible] Cow Candy per annum, that should result in $90 million worth of export earnings coming directly into this community. And at a time of global economic challenges, that will be a significant boost to our regional economy and to the creation of new jobs in this area. Not only jobs here in the factory, but flow-on jobs to the farmers and all of the service industries that they will use, including fertilisers and fuel and so on. So it is a tremendous boost to our region. It gives hopes to our cane farmers and their families. It will bring prosperity back [inaudible] through agriculture. It builds on a strength we've had here before. We have many farmers and farming families who have the skills in being able to farm sugar cane, and now we have a value-adding factory which will be able to turn that raw product into an export industry.
So it's a tremendous achievement, and I congratulate Biocane. And I'd like you to know that we're with you all the way in this. We'll do whatever we need to to support and encourage you. We know how much our regional economy depends on your success. So we wish you all the very best.
GRIMLEY:
Thank you Debbie.
TREASURER:
Over to you.
JOURNALIST:
What specifically was the concern originally under the old government?
TREASURER:
Well, the previous government conducted an audit and they had some concerns that the commitments that had been given had not been adhered to. The view from Biocane was that they had not been fairly treated during that process. So Minister Burke has been through a thorough analysis and employed independent, outside experts to examine the claim and counter-claim, and in the wake of all of that information has decided to reinstate the grant.
JOURNALIST:
Can I just ask a question to Scott. How costly has the delay been, and when will we actually start to see production now?
GRIMLEY:
Well, the last question first. We're anticipating being into commissioning in March this year. It's a big ask, and we're working two shifts to try and achieve that. The delays have been costly. There's no question about that. Steel prices through last year rose 80 per cent, and steel is a big component in this. But the biggest cost really has been to the growers, who really have had cane that they've been trying to maintain in the ground, fertilise and keep cultivated, with nowhere for it to go. But now that this good news is given, we're going to be doing all we can to encourage the growers and to assist the growers to get production up and going as fast as they possibly can, and to start to put the past behind us and move forward very positively.
JOURNALIST:
Mr Swan, I wanted to ask about the front page story on The Australian today, people calling for (inaudible) to job network. Is that a possibility?
TREASURER:
Well, the Government takes all of its decisions when it comes to future policy within the confines of Cabinet. I'm not going to speculate about what may or may not have taken place in terms of Cabinet considerations. But we've always got an eye on what's occurring out there in terms of employment services, but I've got nothing further to add.
JOURNALIST:
Mr Swan, there's been another death of an Australian soldier in Afghanistan. Would you have anything to say about that?
TREASURER:
Well, as I understand it, the Prime Minister has made a statement about this matter today. But can I just make the point that the thoughts and prayers of all Australians go out to the family of the deceased in Afghanistan. But over and above that I'll leave further comment to the Prime Minister.
JOURNALIST:
Mr Swan, the Treasurer of Queensland has come out today and said that 13,000 Queensland jobs could be lost, small business, those sort of areas. What are your thoughts on that? Is that something you can foresee happening?
TREASURER:
Well, there's no doubt that we're living in very challenging times. The global financial crisis will have a substantial impact on this economy, as indeed it is impacting all around the world. And global growth is slowing, which means that domestic growth will slow as well. So, it's going to be a tough year ahead, and there's no point in gilding the lily.
But I would like to make this point: I think we all need to keep a sense of perspective in this environment, and that perspective is that this country is better placed than most to deal with the fallout from the global financial crisis. And the Government, in terms of its response to the global financial crisis, has perhaps more flexibility than any other government in the western world. And that's why we acted early. We acted early with our Economic Security Strategy to bolster growth and to bolster jobs. We acted early to protect the deposits of people in Australian banks, and provided a wholesale funding guarantee for Australian banks. We've also seen a prolonged drop in petrol prices, and depreciation of the exchange rate. All of those things will put a very substantial stimulus into the Australian economy to lift demand in the face of falling demand globally.
So I think Australians need to keep an eye on the underlying strengths in the Australian economy in this very uncertain global environment. And the Federal Government will put in place all measures that it can responsibly take in the face of global conditions should they deteriorate even further.
JOURNALIST:
Have you been able to see the results from the economic stimulus package yet?
TREASURER:
Well, the economic stimulus package and the payments that went with it only began to flow from the 8th of December, so it's a bit early to make any predictions about that. And we've also had a very strong reduction in interest rates over a relatively short period of time. Those two factors combined mean that fiscal policy and monetary policy are both moving in the same direction. That will certainly strengthen our economy in the first quarter and the second quarter of this year. The extent to which that is the case remains to be seen. But we're optimistic because we acted early that we have strengthened the Australian economy early in the face of the global financial crisis. But as I've said and the Prime Minister has said before, we stand ready to take further action should it be required given global circumstances.
JOURNALIST:
When do you expect to see results from the stimulus package?
TREASURER:
I'm not out there in the business of speculating about what future figures will say. There are plenty of people out there in the private sector speculating with a wide range of forecasts. What I can say is that Australia is in a better position than most other countries in the world. The Government has more flexibility in terms of the policy levers it can use, and it is using them. And in addition to that, we've got a fall in petrol prices and a depreciation of the exchange rate. For Australia what that means is we have a very substantial stimulus, a stimulus to demand in the economy. And on top of that, we have a banking system in better nick than just about any other country in the world. All of those things strengthen our economy in the face of the global financial crisis.
